Midterm Review Flashcards
What does the PCAOB do?
The Public Company Accounting Oversight Board protects investors by auditing the auditors.
In which part of the balance sheet would you find prepaid expenses?
Assets
In which part of the balance sheet would you find unearned revenue?
Liabilities
In which part of the balance sheet would you find accrued expenses?
Liabilities
In which part of the balance sheet would you find retained earnings?
Stockholders’ Equity
On which financial statement would you find the sales revenue?
Income Statement
On which financial statement would you find the accounts payable?
Balance Sheet
On which financial statement would you find the interest expense?
Income Statement
When we increase an asset, do we do it with a debit or a credit?
Debit
When we increase a liability, do we do it with a debit or a credit?
Credit
When we decrease equity, do we do it with a debit or a credit?
Debit
How do we find the gross profit margin?
Gross Income divided by Net Sales
How do we find gross income?
Revenue subtracted by COGS
What does total asset turnover ratio measure?
How efficiently a company uses its assets to generate sales revenue.
What is the numerator for the asset turnover ratio?
Net Sales or Operating Revenues
